- Weaker dollar supports prices above $17,000/t
- High inventories continue to cap upside
London Metal Exchange (LME) three-month nickel prices remained broadly stable at around $17,000/t in the week ended 28 August 2026 compared with $17,025/t a week earlier. Prices found support from a weaker US dollar but remained capped by elevated refined nickel inventories and cautious downstream demand.
Prices hold above $17,000
LME nickel futures rose to $17,042/t on 25 August before easing later in the week. Prices remained above $17,000/t for three consecutive sessions as declining US Treasury yields weakened the dollar index below 99.
The monthly average stood at $16,953/t in August, higher than the previous month, although nickel remained down 1.27% for the month. The price was still up 2.38% on an annual basis.
High inventories limit upside
LME nickel inventories remained elevated at 268,362 t on 28 August, compared with 268,488 t a week earlier. Stocks had increased to 268,608 t on 25 August, with accumulated growth of around 0.9% during August.
The high inventory position continued to signal ample refined nickel availability and limited the impact of supportive macroeconomic developments. Chinese downstream purchasing also remained subdued, with spot trading activity described as mediocre.
China’s social nickel inventories declined by around 1,000 t w-o-w to about 130,000 t, while bonded-zone stocks remained stable at around 1,400 t.
Indonesian supply developments provide price support
Indonesian supply developments offered some support to nickel prices. Expectations around ore production quota approvals remained a key market focus, while cost pressure has started affecting intermediate-product production.
An Indonesian hydrometallurgy project may reduce mixed hydroxide precipitate (MHP) output by around 30% in September because of weak nickel prices and production cost pressure. Meanwhile, MHP supply availability improved during the week as some projects partially recovered production following concentrated sulphur arrivals.
MHP payables remained under pressure because weak nickel and cobalt sulphate prices reduced downstream acceptance. In contrast, high-grade nickel matte supply remained relatively tight, supporting nickel payables as its economics remained more favourable than MHP for some external raw-material buyers.
Outlook
LME nickel prices are likely to remain around current levels in the coming week, with the market balancing macroeconomic support against persistent refined supply surplus. A weaker dollar and potential Indonesian supply restrictions may provide support above $17,000/t, while elevated LME inventories and subdued downstream procurement are likely to limit a sustained upside move. Market attention is likely to remain on Indonesian ore quota approvals, intermediate-product output and global inventory movements.
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